Smart Grids Hold Promise for the Vendors, Service Providers -- and the Environment

The machine-to-machine (M2M) market is interesting because it is so big. The idea of having gadgets speak to widgets and gizmos to thingies without human intervention is fascinating, a bit frightening, and suggests huge savings and efficiencies. While it isn't new, it is the subject of a tremendous amount of sudden attention.

Within this broader market, an even more entertaining segment is smart grids.I wrote about the sector last month and found it to be a great deal of fun. After years of writing about familiar technologies that are well explored and in which a new approach may make a small difference in market share, it's refreshing to consider something that is just coming into being. It's also fun because one of the side benefits -- saving tons of energy -- is so well aligned with the fight against global warming. It's a feel-good technology.

Maravedis has released an interesting summary of where the smart grid industry is. The main points are that they are becoming "a new driving force for many wireless carriers and utility companies." The writer, Senior Analyst for Broadband Applications Julien Blin, says that AT&T, Sprint Nextel/Clearwire, T-Mobile and Verizon Wireless are the frontrunners and that a number of technologies-including Long Term Evolution (LTE), WiMax, Wi-Fi and Zigbee -- will compete.

There is another reason that smart grids are hot: The economic stimulus-officially, the American Recovery and Reinvestment Act-and the Department of Energy will pour about $4 billion into various aspects of the technology. The Journal of New England Technology describes how well that region wil be represented in the smart grid gold rush. The story also does a good job of conveying the sense of how hot an area like this can become. At this point, the story says, there are far more questions than answers about how the funds will be distributed.

There are, however, some things to keep in mind. The first is that while Blin's point that this will help push 4G may well be true, it is important to remember that a lot of the messages sent in a smart grid are very short and don't require fast delivery. Telling a home's thermostat to ratchet down five degrees for a few hours or not to start the dish washer until 2 A.M. isn't exactly as demanding as streaming a live sports events in high definition. Indeed, such messages can comfortably run on 2G networks. There also are very varied lists of technologies, including high capacity gear for use in the field and consumer electronics devices for homes. There could be a lot of winners, but it will be a confusing landscape that will take a while to sort itself out.

Smart grids, and the M2M world to which they belong, are potentially huge sources of revenue for vendors and service providers. The key now is patience as technical development continues and the impact of a major and perhaps transforming catalyst-the stimulus-works its way through the system.

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